Millennial Plastic Surgery PLLC v. James

Background

Millennial Plastic Surgery PLLC sued Meghan James over a series of contracts related to livestreaming two cosmetic surgical procedures. Millennial alleged that James breached the contracts because her social-media account could not livestream the procedures and because she defamed Millennial. The contracts also required James not to slander Millennial.

The court had earlier granted in part and denied in part Millennial’s motion for a preliminary injunction. On December 20, 2021, the court ordered James to answer, move to dismiss, or otherwise respond to the Complaint by January 12, 2022. James did not meet that deadline. The Clerk then entered a certificate of default. Four days later, James moved to set aside the default. She appeared without a lawyer at an earlier show-cause hearing, and counsel later filed papers in the case.

Legal standard

Under Federal Rule of Civil Procedure 55(c), a court may set aside an entry of default for “good cause.” Courts in the Second Circuit consider three factors: whether the default was willful, whether the defendant has a potentially valid defense, and whether setting aside the default would prejudice the plaintiff. The court also considered the strong preference for resolving disputes on their merits and the more forgiving standard applied to an administrative default rather than a default judgment.

Court’s analysis

On willfulness, James argued that she and her counsel were not served with the Complaint and that counsel did not learn of the December 20 order because its email notification was in a spam folder. Millennial argued that James and counsel knew about the case because they had participated in court proceedings and communicated with Millennial. The court found that James’s conduct was negligent or careless but not deliberate enough to constitute willfulness. It also noted that defense counsel’s paralegal contacted Millennial’s counsel promptly after the request for a certificate of default and that James filed her motion four days after the Clerk entered the default. This factor favored setting aside the default.

On the defense factor, James relied on a proposed answer. She asserted that she performed her contractual obligations, was not banned from Instagram when the procedures occurred, and did not defame Millennial. The court found that these contentions met the low threshold for showing a potentially meritorious defense, even though James did not submit an affidavit. This factor slightly favored setting aside the default.

On prejudice, Millennial argued that James would continue delaying the case and creating litigation difficulties. The court rejected those arguments as speculative and based only on delay. Millennial did not show that the delay had caused loss of evidence, increased difficulty in discovery, interference with a remedy, or another concrete form of prejudice. This factor also favored setting aside the default.

Disposition

The court concluded that the three factors, together with the preference for resolving disputes on their merits, supported setting aside the default. James’s motion to set aside default was GRANTED. James’s motion requesting oral argument was DENIED as moot. The court directed James to answer the Complaint no later than February 17, 2022, and directed the Clerk to terminate the motions identified as Documents 34 and 36.